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License and Regulate Online Poker Now

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Publication

Global Gaming Business

Written By

Frank J. Fahrenkopf, Jr., president and CEO, American Gaming Association

Each month, I carefully consider the subject of this column because I recognize it as an opportunity to inform, educate and, on rare occasions, call the gaming industry to action. This is one of those rare occasions.

Last month I wrote about the growing support from around the nation for licensing and regulating online poker and the challenges facing this effort. Since that June column, the need for licensing and regulating online poker in the United States has become more and more obvious. For example, another set of indictments has been brought against individuals running illegal offshore gambling websites, and at least one of the major companies that has recently been investigated has simply chosen another web domain and is still doing business in the U.S.

The American Gaming Association (AGA) and our member companies are in full support of the Justice Department enforcing U.S. law, but it has become crystal clear that law enforcement cannot do the job alone. What is needed is a change in current federal law. Otherwise, as I told reporters recently, these indictments are at best half-measures.

It is also clear that it is going to take a united effort by the gaming industry and our allies to overcome the alliance of the activists opposed to gambling in all forms with those who have legitimate but ill-informed concerns about the risks of online poker.

The opposition of the anti-gaming crowd is a given, but the industry has overcome their opposition time and time again. However, it will take a fact-driven, multifaceted education campaign to change the minds (and votes) of those who believe that online poker poses real risks such as fraud, underage gambling and increased problem gambling.

The AGA has begun such a campaign. We will be delivering several important messages, many centered on the goal of helping law enforcement keep the bad actors out of the U.S. market. Unfortunately, you can be assured that the millions of Americans playing poker online, just as was the case with other prohibition efforts, will continue to play as long as there is a venue. And as long as there are players with money, there will be companies willing to flaunt U.S. law to provide such a venue. We need to end this cycle and create a safe, regulated environment for players.

In addition to the law enforcement message, we also will need to demonstrate that the risks that some associate with online poker can be eliminated with the use of proven techniques and technologies.

The risks of legalizing online gambling most often cited by opponents are: 1) its susceptibility to fraud and criminal activity; 2) its lack of control over who is playing; and 3) the increased danger to problem gamblers. There may have been a time when these were real risks. Today, they really are not issues. Let’s take them one at a time.

First, in order to obtain a U.S. license, we would expect companies seeking licenses would go through the same stringent background checks that U.S. commercial casino operators go through today. That alone goes a long way toward eliminating fraud and other criminal activities. In addition, U.S. licensing would mean these companies would be scrutinized with regard to bank activities just as brick and mortar companies are in the U.S. As for the integrity of online poker games, admittedly online poker presents its own set of unique challenges, including the potential for player collusion and the use of poker “bots” to simulate play. But every hand and bet played online can be recorded and monitored, making it easy to spot cheating and to lock the accounts of those suspected of cheating.

Second, there are very sophisticated technologies and procedures that will allow licensed companies to identify individuals so they can exclude players who do not qualify (due to age or location restrictions) or have been banned from online poker sites. These procedures require a customer to provide his name, address, telephone and credit card information or bank account data. This data would then be cross-checked through databases maintained by credit firms and public entities such as motor vehicle departments. Finally, regulators would conduct routine audits to make certain that operators are meeting these requirements. These types of checks would make it virtually impossible for someone underage to play poker online and would allow companies to bar individuals from states where online poker isn’t legal.

Third, although research has shown that online poker players are not particularly susceptible to developing pathological gambling problems, in many ways, it is easier for online sites than it is for bricks and mortar casinos to implement responsible gaming programs such as preventing players from gambling who have asked to be excluded from an online poker website. It is an easy matter for online sites to provide responsible gaming tools and information as well as on-screen links to problem gambling treatment services. They also can provide easy access for the poker player to information about his gambling history; tools that will permit the poker player to limit the size of his bets or the amount and frequency of his deposits into his online gambling account; or to voluntarily self-exclude from the website entirely.

These are just a few examples of how we can address the common concerns about online poker, and we need the readers of this magazine who support the licensing and regulation of online poker to help us deliver these messages. We firmly believe, as I said in this space last month, that the Congress of the United States should amend the Unlawful Internet Gambling Enforcement Act and direct the federal government to set online poker standards to ensure that states, where a safe regulatory structure exists, will be able to issue a license and regulate online poker. The industry can provide tools to mitigate any risks and the nation will benefit because we can more easily enforce our laws, protect our citizens and, yes, add jobs and much needed tax revenue.